Millers address rice quality concerns, warn of market demands

Following several difficult, extremely hot growing seasons, the quality of Louisiana’s rice has become a persistent worry. During winter meetings, rice producers have heard about quality concerns from prominent researchers and breeders, millers and specialists.

“This is a trend that’s developed in the quest to drive field yields,” says Johnny Morgan, president of Louisiana Rice Mill in Mermentau, La. “Somewhere along the way, the quality of newer varieties hasn’t measured up to the older varieties.”

Curious about the quality trajectory, Morgan pulled numbers together. “In 1999, I believe 71 percent of the rice grown in Louisiana was Cypress. In 2000, it was 50 percent and tailed off from there. That was a shame because Cypress was a very good, high-quality variety we had here.

“The newer varieties tend to be a bit more inconsistent. By that, I mean they’re chalkier, the grain size isn’t always uniform and milling yield quality tends to be lower than the old varieties.

“I’m just telling you what we’re seeing. And for whatever reason – I’m not a breeder or scientist – the quality has degraded. Chalk is the main complaint we get from those buying rice.”

Both foreign and domestic customers have not been shy about the issue. Complaints about quality “have become more frequent,” says Morgan. “When you talk about chalk, it’s a matter of definition. If you go by the USDA, the rice would make a U.S. No. 2. However, the buyer may say ‘I don’t care if it’s a U.S. No. 2. I think it’s too chalky, there’s a lot of chalk inherent in the grain. The USDA may not grade it as too chalky but it is.’”

Many dislike chalk because the cooking quality isn’t as good as with clear grains.

Complaints have accelerated on the export front, says Morgan. While the situation has been on a low boil in the United States “it’s really picked up with foreign buyers. The Mexican and Central American buyers have been especially unhappy – and they’re buying milled and rough rice.

“We had a customer who owns mills and mostly buy rough rice. They changed up and bought milled rice, hoping the quality would be better. They said it didn’t make a difference and complained that ‘hey, this is simply too chalky for our customers. Our end-users say when the rice cooks up it’s too mushy, it doesn’t keep well, and it doesn’t cook consistently.’”

Morgan hears the same from cereal manufacturers and industrial customers. “They’re always concerned with cooking quality and consistently when cooking. That’s why they’ve tended to focus on specific varieties. They know if they can find a consistent variety, it means less trouble and work.”

More and more customers are honing in on that, he says. “They’ll say ‘look, I prefer one good variety.’ That way the rice they buy looks the same and cooks the same. The end-users want better quality in the product they’re getting.”

Arkansas

In Arkansas, rice quality is not a novel issue.

“Buyers, in general, want the highest quality rice,” says Keith Glover, president of Producers Rice Mill in Stuttgart. “We strive to achieve that. The quality issue was highlighted due to an overall bad rice crop because of record heat during the summer of 2010. The quality was not as good as in years past.”

For more on the 2010 quality issues and fallout, see here, here and here.

Glover, who has been in the milling business for 30 years, says there have always been customers who demand certain varieties. “That’s nothing new. Certain accounts, for whatever reason, say certain varieties work better than others. Even though there’s a lot of talk about that currently, it isn’t something that’s happened overnight.”

An example of this, says Glover, “is when we used to sell rice to the European market and they used to demand that the rice be a Newbonnet-type variety. A lot of industrial accounts prefer one variety over another because of amylase content or something else.”

As for chalk, “the University of Arkansas has done a lot research. In general, when there are hot summers, there will be more chalk in all varieties.”

In recent weeks, Glover says many farmers have asked if the mill will have separate marketing programs, or pools, for hybrids versus non-hybrids. “For the 2012 crop, we will not. They will all be in the same pool.”

Definitions, signals, trends

Back in Louisiana, Morgan says “rice quality” currently has no hard-and-fast definition. An effort led by the USA Rice Federation is attempting to change that and “try to move the needle back to a high-quality level for U.S. long-grain rice. At the same time, they want to balance yield with quality and that’s tough.

“A lot of researchers have told us ‘if you want higher quality, then it’ll mean lower yields.’ As a mill, we’re just saying ‘here’s what we’re hearing and we’re forced to respond.’”

It is imperative that the quality issue be addressed, says Morgan. “Eight to 10 years ago, the perception was that U.S. long-grain rice was the highest quality in the world. However, at the time, if you look at the varieties being grown, they were more consistent and higher-quality than those now. A farmer, even if he couldn’t count on such high yields as today, could plant them and get a consistent yield and high milling crop.

“Now, look at the rice we’re shipping out of the United States. It doesn’t even look the same. You go ‘How could (the current) U.S. No. 2 and (the older) U.S. No. 2 be the same? That can’t be.’”

Sadly, says Morgan, due to quality issues U.S. rice is slipping to a second tier position. “South American rice is considered higher quality. That’s hurt our image, hurt our ability to export rice. When people look for high-quality rice they may not be thinking of the United States first. We’re now a second or third option.”

What has been the reaction of Louisiana’s rice farming community to the push for better quality?

“We’re not telling farmers what to do,” says Morgan. “All we’re saying is that rice varieties aren’t created equal and they should know there’s greater demand for high-quality varieties.”

The chief driver of that are market forces. “You can sell higher quality rice into more markets at better prices. We’re only reflecting how we can sell rice out of the mill.

“Growers have asked me for a set differential between the varieties. I hate to use the word ‘discount’ because, really, it just comes down to what the rice is worth. Some rice is worth more, some less. That’s how it works.”

There is no absolute differential, insists Morgan. “That number changes given the markets we’re looking at. If we can move lower-quality rice at good prices, the difference is smaller. At times when we have trouble moving any of it, the differential is wider.”

However, “there are certain varieties of rice that we know, on average, are more problematic. Of course, there will bad lots of any variety – it won’t all be of the same quality. But certain varieties do have better markets than others.

“It’s time that a signal is sent that quality is a problem and needs to be addressed. If we don’t, we’ll continue to slide down the scale. And if you’re not the one with the best quality, you can’t sell rice at a premium.”

Louisiana Rice Mill buys medium- and long-grain rice and sells to both domestic and international markets, industrial users and packagers and everything in between. “So, we have a good overview and see the issues on all fronts.

“It appears we’re heading back to variety-specific purchasing. If you IP (Identity Preservation) rice of good quality you’ll have a much better shot at getting a good price compared to a guy who doesn’t IP his rice and mixes it all together.

“That’s a message that farmers are hopefully getting. Of course, it’s up to them to make a decision on what to plant. It’s not easy but they should know how the markets are trending.”